Medicare General Enrollment Period: What Are the Implications for Federal Retirees?

The General Enrollment Period (GEP) for Medicare Part A and Medicare Part B occurs annually between January 1 and March 31.

This column discusses what the 2024 GEP means for federal employees and retirees who have reached their 65th birthday.

SEE ALSO:

• 2024 Medicare Premiums
• Why Some Federal Retirees Pay More for Medicare Part B

Review of the Four Medicare Enrollment Periods

Most individuals eligible to enroll in Medicare find the Medicare enrollment process to be confusing. It is therefore important to review the four Medicare enrollment periods and how the four enrollment periods apply to most federal employees and retirees when they become first eligible to enroll in Medicare at age 65.

1. Initial Enrollment Period

Upon reaching age 65, a federal employee or retiree is eligible to enroll in Medicare. In general, individuals who worked most of their lives and paid the payroll taxes become eligible to enroll in Medicare, including Medicare Part A (Hospital Insurance), Medicare Part B (Medical Insurance), Medicare Part C (Medicare Advantage) and Medicare Part D (Prescription Drug program).

They enroll in Medicare Part A in which there is no premium cost because working individual individuals prepaid the premiums through the Medicare payroll tax (the “Hospital Insurance Tax”). At the time of enrolling in Medicare Part A, an individual is given the option of enrolling in Medicare Part B. Unlike Medicare Part A, there is a monthly premium to be paid in order to be enrolled in Medicare Part B.

Most federal retirees enrolled in the Federal Employees Health Program (FEHB) do enroll in Medicare Part B, even though there is no requirement to be enrolled in Medicare Part B. This is because Medicare is considered primary coverage (paying on average 60 to 80 percent of doctor and hospital bills) while the FEHB program is considered secondary coverage (paying on average the other 20 to 40 percent of the doctor and hospital bills).

However, if a federal employee continues in federal service past age 65 and is enrolled in an FEHB health plan, the employee is advised not to enroll in Medicare Part B until he or she retires from federal service. As explained in the next section, enrollment in Medicare Part B would then occur during the Special Enrollment Period (SEP).

Those federal employees who retire from federal service before age 65 and who are enrolled in a FEHB health insurance program are encouraged to enroll in Medicare Part A and Medicare Part B during their Initial Enrollment Period (IEP).

The IEP is a 7-month period centered on the month an individual becomes age 65. The IEP includes the full three months before the month the individual becomes age 65, the month the individual becomes age 65, and the full three months after the month the individual becomes age 65. The following example illustrates:

Example 1. Steve, a federal retiree, will become age 65 on June 23, 2024. Steve’s IEP starts on March 1, 2024, three months before the month Steve becomes age 65, and ends September 30, 2024, three months after the month Steve becomes age 65.

Note that if Steve does not enroll in Medicare Part A during his IEP, then he will not be penalized when he enrolls in Medicare Part A during his next opportunity (which is the next GEP: January 1, – March 31, 2025). But if Steve decided not to enroll in Medicare Part B when he enrolled in Medicare Part A during his IEP, then Steve could be subject to a Medicare Part B late enrollment penalty when he enrolls during a future GEP.

2. Special Enrollment Period

Those federal employees who are enrolled in the FEHB program are advised not to enroll in Medicare when they become age 65 if they intend to remain in federal service at least for the next six months.

This is because their FEHB enrollment is primary coverage as long as a federal employee and is enrolled in an FEHB program health plan. If they were to enroll in Medicare, Medicare Part A and Medicare Part B would be considered secondary coverage. However, since there is no premium cost for Medicare Part A, most federal employees enrolled in an FEHB program health plan do enroll in Medicare Part A while still in federal service.

But Medicare Part B is different. There is a premium cost for Medicare Part B. The higher a Medicare Part B beneficiary’s income, the higher the beneficiary’s monthly premium. The Medicare Part B premium could be significantly higher because the beneficiary is still working. It therefore makes sense for an employee who is aged 65 or older in federal service and enrolled in an FEHB program plan to delay enrolling in Medicare Part B.

The question then becomes when should a federal employee over age 65, enrolled in Medicare Part A and enrolled in an FEHB program plan, enroll in Medicare Part B, and will there be a late enrollment penalty?

The answer is when the employee retires from federal service, the retired employee can enroll in Medicare Part B during the employee’s Special Enrollment Period (SEP). The SEP is an 8-month period that begins on the “effective date” of an employee’s retirement. For FERS-covered employees, the “effective date” of his or her retirement is the first day of the month following the month the employee retires.

For CSRS and CSRS Offset employees, the “effective date” of retirement is the next day of the month if the employee retires on the 1st, 2nd, or 3rd day of any month. If a CSRS or CSRS Offset employee retires on any day starting from the 4th day of the month to the last day of the month, the effective date of retirement is the first day of the following month. The following two examples illustrate:

Example 2. Peter, age 67, retired as a FERS employee from federal service on December 31,2022 when he was age 66. He was enrolled in the FEHB program. At the time he retired, Peter was enrolled in Medicare Part A but not Medicare Part B. Peter’s SEP was the 8-month period starting January 1,2023 (the effective date of his retirement) and ended August 31, 2023 (the end of the 8-month period). He enrolled in Medicare Part B on February 15,2023 and therefore was not subject to a late enrollment penalty for Medicare Part B..

Example 3. Laura, age 71, retired as a CSRS employee from federal service on January 1,2022 when she was age 69. She is enrolled in the FEHB program. At the time she retired, Laura was enrolled in Medicare Part A but not Medicare Part B. Laura’s SEP was the 8-month period starting January 2,2022 (the effective date of her retirement) and ending September 1, 2022 (the end of the 8-month period). She enrolled in Medicare Part B on March 15,2022 and therefore was not subject to a late enrollment penalty for Medicare Part B.

3. Annual Enrollment Period

This Medicare enrollment period is held annually between October 15 and December 7. During the AEP, individuals enrolled in Medicare Part A and Medicare Part B can join, switch, or drop a Medicare Advantage Plan and/or join, switch or drop a Medicare Part D (Prescription Drug coverage plan).

Federal retirees enrolled in the FEHB program have access to Medicare Advantage plans and therefore have little reason to enroll in a Medicare Advantage plan offered by a private insurance company outside of the FEHB program.

Most Federal retirees do not enroll in Medicare Part D because they have little need for “catastrophic” drug expense coverage. But they can enroll in Medicare Part D if they have to during an AEP and not subject to a late enrollment penalty.

4. General Enrollment Period

The GEP allows federal retirees who:

(1) Did not enroll in Medicare during their IEP; or

(2) enrolled in Medicare Part A only during their IEP because they were in federal service and enrolled in the FEHB program). However, they did not enroll in Medicare Part B during their SEP.

Any individual age 65 or older can enroll in Medicare Part A and Medicare Part B during the GEP. The GEP runs annually from January 1 through March 31. Under rules that took effect January 1, 2023, when an individual enrolls in Medicare anytime during the GEP, coverage becomes effective the first day of the following month. The following two examples illustrate:

Example 4. Lawrence, age 68, retired from federal service at age 62 and enrolled in Medicare Part A during his IEP but did not enroll in Medicare Part B. Lawrence was not eligible for a SEP. He therefore enrolled in Medicare Part B during the GEP, January 1 through March 31, 2023. He enrolled on March 25, 2023. His Medicare Part B coverage becomes effective April 1, 2023.

Example 5. Sylvia, age 70, retired from federal service on December 31,2022 at age 68. When she was age 65 Sylvia enrolled in Medicare Part A but not Medicare Part B. Sylvia’s SEP was January 1,2023 through August 31, 2023. During her SEP, Syliva failed to enroll in Medicare Part B. Her next opportunity to enroll in Medicare Part B is the GEP being held from January 1,2024 through March 31, 2024. Sylvia enrolled in Medicare Part B on January 9, 2024. Her Medicare Part B coverage becomes effective February 1, 2024.

Medicare Part B Late Enrollment Penalty

Individuals who do not sign up for Medicare Part B when first eligible may have to pay a late enrollment penalty for as long as they are enrolled in Medicare. Their monthly premiums for Part B may increase by 10 percent for each full 12-month period that they could have been enrolled in Part B but did not sign up for it. The following example illustrates:

Example 6. During 2022, the Medicare Part B base monthly premium was $170.10. Alvin’s IEP ended on January 31, 2022. Alvin did not enroll in Medicare Part B during his IEP. He enrolled in Medicare Part B in January 2024 during the GEP. His Part B coverage becomes effective on Feb. 1, 2024. His Medicare Part B premium during 2024 is equal to:

Note the following:

1. Alvin’s permanent penalty of $34.02 continues in the future and will be added to his base monthly premium every year.
2. There is no penalty for late enrollment in Medicare Part A.

Medicare Part A and Medicare Part B Enrollment Procedures

The following table summarizes the enrollment procedures for the IEP, SEP and GEP enrollment periods.

How to Enroll in Medicare Part A and Medicare Part B